Where there is power, there is resistance.

Karlheinz Schreiber, a notorious German-Canadian arms dealer and convicted tax evader owned a Swiss bank account labelled “Maxwell“, which was in the focus of court proceedings between 1995 and 2007. The beneficiary of this account is unknown, as is the provenance of the 2.6 million Euros credit on the account.

Schreiber has long haunted German and Canadian politics. He was a close associate of former Bavarian premier Franz Josef Strauss, the co-founder of Airbus. He was also involved in undeclared cash transfers to the German conservative party, a scandal that led to the downfall of former German chancellor Helmut Kohl. Schreiber himself and one of his businesses paid at least the equivalent of 60,000 Euros to the Conservative party, the purpose of which is unknown. Schreiber moved part of his operations to Canada in the late 1970s, speculating on the real estate market. A venture for which he had raised the equivalent of 7.5 million Euros from wealthy Bavarians, amongst them the Strauss family, resulted in substantial losses.

When Augsburg legal authorities began to investigate Schreiber’s finances in 1995 over suspicions of tax evasion, they raided his Kaufering home, and he fled to Switzerland. In 1999, he fled to Canada, where he was involved in the Airbus affair, and made cash payments of CAD 250,000 to former premier Brian Mulroney. Schreiber, who holds dual German and Canadian citizenship, was eventually extradited to Germany in 2009 following a protracted legal battle. In 2010, he was convicted of tax evasion. The extensive court proceedings brought an account labelled “Maxwell” to light. The Augsburg legal authorities initially hypothesised that “Maxwell” was a codeword for Max (Maximilian Josef) Strauss, the son of Franz Josef Strauss. They started to investigate the finances of the Munich based lawyer. Initially, judge Brigitta Schiffelholz (Baur) refused permission to raid Max Strauss’ home, a decision which was then overturned.

However, by then Strauss had found out about the impending raid. He said that his laptop caught a virus and and he zero filled his hard drive shortly before his home was raided. The laptop was subsequently handed over to an independent expert; attempts to recover the data failed, and the process was not documented properly. The hard drive then went missing. After some time, an image of a hard drive resurfaced, and it was assumed that it reflected Max Strauss’ hard drive. Another expert then located partial file names on this image, “Master.txt, Georg.txt and Max???“. The original name of the “Maxwell” bank account was “Master“, which altogether could be interpreted as a connection between Max Strauss and the “Maxwell” account. A witness, the manager of Schreiber’s Kaufering road marking business, stated that Schreiber used to refer to Max Strauss as “Maxwell”, jokingly likening him to the famously chatty US columnist Elsa Maxwell.

Max Strauss vehemently denied any connection to the bank account, and he fell into a deep depression a few months into the investigation, which was so severe that he had to be hospitalised. He was subsequently convicted of fraud in a separate case. He had to pay a fine of 300,000 Euros following a deal in which he claimed limited responsibility on grounds of mental disease. He was later acquitted of any connection to Schreiber’s “Maxwell” account, and the matter remains unsolved.

The question that remains is where the 2.6 million Euros on the Maxwell account originated, and what they were meant to be used for. Clearly, the account would have had a purpose of some description. Schreiber owned a road marking business that also actively developed machines and paint. It was a legitimate company, and while it was healthy and prospering, with a branch in Canada, it was hardly a business leader, and it only served the local area. Schreiber was also known for his lobbying work, mainly in the arms trade, negotiating deals with Saudi Arabia, and aerospace, which also reportedly involved the German secret service. Moreover, he ran slush funds for politicians, yet the exact dependencies and the purpose of his cash transfers often remained opaque.

All these activities had the potential to generate this amount of money, and also necessitate off-the-books transfers. A fresh look at the matter is urgently needed, as there is bound to be an illegal transaction at some point before 1995 where it could form the final piece in the puzzle.

This is part of an investigative series on Bavaria and transnational organized crime.

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